ST. LOUIS –
The worst of the recession appears to be over, executives and members of the Home Technology Specialists of America (HTSA) reported, with new luxury home construction and big-ticket installations leading the way out of the economic rut.
“We’re well beyond the bottom,” observed executive director Richard Glikes during the group’s annual “Autumn Pump Up” meeting, held here at The Ritz-Carlton earlier this month. Glikes based his assessment on the growing number of large home-installation projects group members are undertaking, including many high six-figure to seven-figure jobs. And mid-price projects, he said, are sure to follow.
Russell Kim, principal of Audio Dimensions, concurred. “I think we hit bottom in 2010,” he said – but not before the recession had claimed two thirds of his nine showrooms. “It’s not pretty. In fact it’s pretty ugly. But we’ve reorganized for the ‘new normal’ and are starting to turn a slight profit.”
Kim expects business will begin to come back next year with the return of the luxury housing market, but it won’t be like it was. “We all need to find a way to survive until the recovery,” he said.
For The Little Guys in greater Chicago, the solution came through a serendipitous dispute with the dealer’s former landlord, resulting in a new and better location in Mokena, Ill. While the business climate still “stinks,” the company gained a new and higher-income customer base while keeping many of its former patrons, co-owner David Wexler told TWICE.
Given the cost reductions that group members have implemented over the last two years, added Glikes, “We’re at a point where we can make money. It will be easy to make a profit with any pop in business.”
That pop can’t come too soon for HTSA, whose annual revenue has declined $200 million from its pre-recession peak three years ago, when members enjoyed 20 percent to 30 percent compounded growth.
Despite the marketplace turbulence, HTSA’s membership ranks have remained fairly stable, with less than a handful of net losses, Glikes reported. “We’re nimble but solid,” he said, comparing the group to a gourmet meal and Best Buy to Mc- Donald’s. “Some people want more than a cheeseburger — they want a different experience.”
Driving growth this holiday season will be 3D TV and hot new services like Apple’s revamped Apple TV. While unit sales of 3D TV haven’t lived up to expectations, the new technology “got people asking questions,” Glikes said. HTSA traditionally sells vendors’ top-of-the-line models, he noted, and those platforms, including the Sharp 925, Panasonic VT and Sony NX810 series, largely feature 3D this year.
The Little Guy’s Wexler added that Skype video conferencing via Panasonic’s latest IPTV lineup is proving to be an even more popular app. “It’s a killer — everyone loves it,” he said.
Still, members need to broaden their mix to compete effectively in the marketplace, and Glikes is disappointed by the group’s slow adoption of solar power, energy management, mobile and home healthcare. “Many businesses were in survival mode for the last year and a half and were averse to risk,” he said. “But these are categories we have to be in.”